Andhra firms queue up to bid for IT parks

The Andhra Pradesh government's new norms for the development of IT parks in the state have ushered in a wave of local players into the field, which till now was the domain of big ticket companies like L&T.

Local construction firms like Nagarjuna Construction Company, Lanco and IVRCL Infrastructures and Projects, besides a company like Nuziveedu Seeds with no background of construction activity at all, are now among the 14 companies that have been shortlisted by the Andhra Pradesh Industrial Infrastructure Corporation (APIIC) to bid for the proposed four IT parks under the private sector.

Nagarguna, Lanco and IVRCL Infrastructure are into core construction activity covering mainly irrigation projects and roads among others.

Nuziveedu Seeds, which has emerged as one of the leading seed producers in the country, has recently entered into a joint venture consortium that has been awarded the Rs 600-crore Andhra Pradesh broadband network project.

With the Rajasekhara Reddy-led government doing away with the practice of selecting the developers through limited invitation as was done earlier by his predecessor, an unusual number of 34 firms have recenlty sent in their expressions of interest to undertake the development of the proposed IT parks - three in Hyderabad and one in Visakhapatnam.

The number rose from the initial 22 firms to 34 after the state government further relaxed the norms by reducing the minimum annual turnover to Rs 75 crore from Rs 100 crore.

As per the fresh notification, the minimum technical qualifications for eligibility to bid for the IT parks are the company should be in existence with a credible track record in construction activity for a minimum of three years and should have a minimum networth of Rs 50 crore.

This made major players like L&T and Rahejas line up along with the local players as the government removed the previous experience in construction of IT parks as a precondition for the four projects.

APIIC has asked the shortlisted firms to submit their detailed bids by April 18, 2005. Ensuring that each successful bidder gets only one project, APIIC has put a condition that only one project will be awarded to each of the four successful bidders.

Cash-rich Nuziveedu Seeds has formed a joint venture with Bangalore-based Divyasri firm, which is making waves in the IT infrastructure development in Karnataka, to qualify for the bidding.

The four parks (land earmarked for each of the project ranges between 60 acres and 150 acres) have become even more attractive for these first timers as the state government has allowed the developers to undertake any other business activity in the 35 per cent of the total area apart from developing an IT park.

"Though they have proven expertise in the construction activity, the only thing these local firms lack is the marketing capabilities required to bring the IT firms to start their operations at these facilities. Keeping this in view, we did not put marketing strength as one of the conditions for the pre-qualification but only mentioned it,"a senior APIIC official told Business Standard.

"Nevertheless, the new model adopted by the state government has been designed as a completely market-driven format, which will yield rich dividends in the coming days," C K Veeresh, joint director (promotion) of the state government's IT department, observed.